The Coming Destruction of U.S. Pensions

“We wanted to know how much money we owe our retirees, and how much of that money we don’t have.”-Cook County Treasurer Maria Pappas (June 22, 2011)

We know the Federal and State governments are in serious fiscal trouble. Having overspent and over borrowed, they are now faced with the real prospect of having to reduce jobs, spending programs and retirement related benefits.

But the States and the Federal government are not alone.

During the boom times of entitlement spending and government largess leading up to the financial crisis, local governments that include cities and counties spent their share of forward earnings as well. And now those uncontrolled fiscal policies are coming home to roost.

For those Americans who have worked for decades with the hopes that their pensions, health care and other benefits would be there when they retire, we offer a glimpse into what the future may hold:

Cook County taxpayers are on the hook for a staggering amount of local debt, according to figures presented by Cook County Treasurer Maria Pappas today. Cook County’s numerous local governments face mounting debts totaling more than $108 billion. And, for the first time, specific figures have been collected for municipal unfunded pensions obligations totaling in excess of $25 billion, almost a quarter of debt countywide. The total figures translate into an average debt-per-household in the city of Chicago of $63,525, and $32,901 in the suburbs.

…

“We knew that debt and unfunded pension obligations were serious problems at the state and federal level and assumed that a similar pattern would follow at the local level. But, quite frankly, I was stunned by the depth of the crisis for local governments,” said Pappas.

“This goes well beyond big cities, where you expect financial challenges. These fiscal problems permeate townships, villages, school districts, park districts, fire protection districts and more, and the taxpayers are on the hook.”

Government employees may currently enjoy higher salaries and benefits than the private sector, but they have been given a false sense of security.

A single county, granted one of the largest in the country, is in hock for $108 billion dollars. That’s roughly 1/7 of the total TARP bailout given to banks in 2008. This is a very big number, indeed.

Whether you are a police officer, fireman, school teacher, or utility worker, you could have serious problems down the road.

While Ms. Pappas offerred some ideas to help reduce Cook County’s spending for the future, she provided no realistic solutions for dealing with the current deficit. The reason for this is obvious. There are no realistic solutions expect for either borrowing the money (and further indebting themselves with high interest) or reset by default.

In previous commentaries we’ve discussed the coming wave of State and local defaults, and it appears that the end game is close. Cook County is not alone, and chances are that every major metropolitan area in the country is heavily in the red. This means that the jobs and retirement futures of millions of people are under threat.

We’ll no doubt begin to hear about bailouts for States and counties in the near future, and if the Republicans and Democrats in Congress have their way, then blank checks are a foregone conclusion. The only other option will be for ex-Federal governments to start reducing benefits and firing workers. Politically, that is something our elected officials, even on the Federal level, are not going to want to deal with, so we are hard pressed to see a scenario where the Federal government lets these pensions go into default – essentially being wiped away. After all, they will do whatever it takes to prevent riots in the streets for as long as possible, even if this means kicking the can down the road for a couple more years and further compounding the problem (as has been the case thus far).

Like Greece, these governments will get the bailouts their hardworking employees deserve, only to saddle those counties and cities, as well as the entire nation, with even more debt.

Eventually, the Federal government will hit its (real) debt ceiling as well. That will happen when no one else but The Federal Reserve will buy the US Treasury’s debt issues, at which point the retirement accounts, 401k’s, savings and dollar denominated assets of every American will be completely and utterly destroyed.

Click here to subscribe: Join over one million monthly readers and receive breaking news, strategies, ideas and commentary.

Copyright Information: Copyright SHTFplan and Mac Slavo. This content may be freely reproduced in full or in part in digital form with full attribution to the author and a link to www.shtfplan.com. Please contact us for permission to reproduce this content in other media formats.

No doubt Tom…. Even though pensions may be on the cutting board first, all those who are depending on social security are going to be surprised as well…. Eventually that ponzi will collapse, whether by default or debasement… Not a good outlook for retirements in general

13 years is nothing compared to many. The baby boom retirement is just “starting” to cross the bridge to the promised land. Downsize now and prep harder. I’m eating preps that are four years old and they are great.

When I was 14 I heard my parents and grand parents talking about the unfunded social security and I knew that I would not be able to count on that because I will retire just after the baby boomers. So the bank will be broke and they will not have had time to restructure things. So I scrimped and saved 20% on my own and put it in IRA and 401k and some stocks. It is not much but it was what I could do. But the stock market crashes over the years have several times,cut that in half. So I purchased a couple of houses to rent. And their value is still falling but I an not underwater because I would not buy when the market was overpriced. But if my tenants can’t keep their jobs due to layoffs, they can’t pay the rent so that won’t help me either. It seems that all those years of doing without and doing what was responsible for the future may all be for nothing. It is frustrating and confusing.

C, the criminals in the government and wall street will continuously change the rules in order to skim everybody’s money and labor one way or another—being responsible is pointless ans the criminals will find a way to take everything. If you are responsible, it may take the criminal cartel of government and big banks a little longer to “take it”, but they will—-that’s what they do!

You are talking pensions. Is there still talk about nationalizing 401K plans etc? What is Congress talking about with regard to private retirenment accounts? IRAS? 403Bs? etc.Could you do a piece on that. Is there is any new news? What about military pensions? How secure might those be?

RE: C – check your 401k rules – you may be able to take out a loan against it as a way of getting your cash out.

Then you don’t pay it back. It’s your money anyway, so you don’t take a credit ratings hit.

You will pay your income taxes, and a 10% penalty (which might be OK especially if you got any employer matching funds – you can keep those invested in case TS does not HTF)

I just took the biggest chunk out yet, am paying off all debt with it, and looking to refinance the house at these current low (~4%) rates from a 30-year mortgage to a 15 year – the payments will go up only like $80, but I cut the payment period in half, and save like $25K.

C: I believe they have a proposal in house to soon limit your access to your 401K, this is to “protect you” from yourself, supposedly, but its really to keep the funds in the account where they can be plundered. Did you know that the government under Gietner’s direction has ALREADY plundered 220 BILLION from the government employees pension fund (thats near a quarter TRILLION) and thats no hearsay, its a fact. I think its only a matter of time before they “liberate” your 401 by having a financial crisis as an excuse, then converting them all to Treasuries under the protection of Social Security. (remember what happened to you SS funds? they are all IOU’s from our broke government now) Trust THEM? take out ALL your 401 while you still can.

I have been lucky. We all pissed and moaned at my department because we have done without some of the toys and extras of surrounding departments in the good times. These days though, we are one of the few that are in the black and have an over-funded pension plan…..

I’ve also been warning people about the impending doom, some listen but most around me just dismiss it as crackpottery. Just remember not to tell anyone you’re stocking up cause when the “Golden Horde” comes, they’ll know you got stuff.

Beefcake, keep warning people, if they don’t want to hear it then move on to the next person. Networking = Survival. As an added bonus the equally prepared friends/family/neighbors wont be attacking you for your grub and gear.

I’ve seen the writing on the wall for a long time. I think a LOT more cops are on board than most of the readers on here realize. The general public should look at police officers as that Canary in the mineshaft, if we are stocking up then maybe everyone would be wise to do the same.

Agreed… I have long since advocated watching local emergency responders… When they bug out, you should be right behind ’em because they will have a very good sense about the state of affairs – especially police officers

I have been a Cop for ten years in Florida, our dept was small however a great dept. In 2008 our dept. was disbanded, the Sheriffs office in the county did not hire anyone of us, on top of this my Lt. borrowed 2000 dollars from me to take care of a legal problem, I have not heard or seen him since, and don’t know where he lives. I should have never trusted him. Anyway I have not found any work since 08, but I manage to prep, thank God my wife still works. Not on

tom- I think most cops would refuse to go door to door confiscating guns. I don’t want some farmer to drill me with his 30.06. Also, unlike people in DC most cops take their oath to defend the Constitution seriously.

Kent- I’m sorry you’re pissed. I am in a state retirement that I have to pay into, the city I work for has to pay a LOT into it for me. I pay city, state and federal taxes. I will never forget the first time some crackwhore in the projects told me that she “Pays my Salary”. Tell me Kent, how does a person without a job get back $9,000(!!!!!) at tax time? Needless to say she didn’t think it was funny as I walked off laughing. The point is a HUGE majority of people on welfare have never worked a day in their lives let alone paid into any money into it.

I work in the private sector and I don’t get a pension plan just because I go to work. You government hacks have robbed us blind and hopefully this welfare ends and ends soon. I shouldn’t have to pay for your miserable existance after you stop working.

This is a typical but unfair reply to public employee pension agreements. I disagree with the “defined” benefit crap most public employee unions have sold their paid for council members and elected officials at all levels. That is just plain wrong.

On the other side of the equation I went to work dilligently for 11 years for a government agency. In that time money was taken from my check that I agreed too and money was “supposedly” set aside for my retirement by the agency I worked for. Now the Agencies have kept track of that and say they are a tad short of their share and its a burden. A burden they don’t think they should pay?

Fine I get to skip my taxes for the remainder – after all that is only fair since you decided to skip out on what you said was being set aside for me right?

I work in the private sector too but I do get a generous 401k match and some other good benefits in addition to my salary. If your job doesn’t offer you anything in the way of retirement don’t blame it on someone else because the company you work for sucks!

Sir…..even if you can only buy a few Silver Eagles each month please do it! Eventually, this will be the only real money that will be accepted. Your family and you will be oh so glad you made the move!

Tom you’re a cop and you’re stocking up on arms and ammo? What, are you afraid of yourself and your own kind?

I read your post below about the crack whore on welfare…do you not realize that all of your “benefits” are welfare. Who came up with bs lunacy that someone can retire on the back of someone else after 20 years? If you’re wearing a government sanctioned costume you’re part of the problem, not the solution. Wake up!

“It’s good to know that people are waking up”?..LOL..14 people is the equivalent to drizzle in a paper cup..the majority of the sheep will never wake up even post SHTF America..The ‘Card Castle Comfort’ attitude has been ideologically hegemonious and is the reason we’re in this position to be blown off the table..

Closed my IRA 3 years ago and is now in a safe place. They will take it all and leave you with an IOU just like the SS trust fund. The only thing in the “fund” is TRUST and mine went away along time ago. LC

You are fairly right. One good thing about our govt is they can’t act fast. I do think IRA’s and SS are as much at risk as any pension. There is already an Obamite economic advisor that wants a 10% every decade tax on all pre retirement holdings…..401k, IRA, pension.

I dint get my retirement from my years in LE for 7 yrs, but I’ve never counted on it….just like I never envision getting SS.

I heard the city manager of Stockton, Ca say if they laid off all but one person who just collected money that the person would be handing it all out to former employees and the city would still be broke.

I lost my job in April 2007 and liquidated my entire 403b to make ends meet until re-entering the workforce 6 months later….haven’t staarted another retirement account yet ‘cept for a $500 Roth IRA certificate that has lost $23 to annual service fees. I’ll never again “bank” on a retirement in the U.S. dollar…

I say invest heavily in guns, gold, silver, soap, ammo, tools…..anything that people will need in a pinch that their hyper-inflated dollars cannot get for them.

If you are building a PV array, wouldn’t it be a good idea to get a few extra panels and keep them in the basement? I’m thinking hail / fallen branch / high wind damage. Plus you have spares in case of early failure, or to replace the array after degradation from exposure to the elements has set in. That might be a very long term scenario, but 20-30 years after the SHTF, nobody will be building more solar cells at a price you can afford.

I have all the pieces to put it together, but I have not done it yet. Right now, I can’t afford to get a lot of spare stuff. Before I do put together the panels, I want to think a little more about the construction so I can design something easily moved.

When dollars permit, I will get more cells. I don’t plan on staying where I am right now anyway. My main concern is portability. The battery is pretty heavy, but I can get it 500 yards off the road with a few stops. Panels are bulky, or can be.

I don’t believe the world will stay in chaos forever. Once the corp dies out, people will again start generating profits by filling needs. It human nature. In that kind of future, solar cells will be easy to get because there may not be a lot of power otherwise.

The solar market has been kept back because it does allow the average guy to generate enough power to run his house without the corporate electric grid and monthly bills. In the future, it may be a necessity to generate your own power.

Besides, in this future world, how valuable will it be to have the knowledge and skill of building solar panels and power systems?

NOYB – I think you have a good point…photo panels are made in a very technical industrial process.

What GC says below is true in the normal market conditions (ie: increased demand -> increased price -> increased supply) but if there is an unlikely total techno-industrial breakdown event there simply may not be the computers (solar or man-made EMP), or energy to manufacture and transport the panels (peak oil).

So spare panels seem like an expensive but good idea…anyone have any info on how they hold up in storage?

Another important tip: Start being nice to citizens. Even those of us who are scrupulously law abiding have stinging recollections of bureaucratic arrogance and law enforcement abuse—not exactly memories that will evoke sympathy when you are eating dog food.

If you really want to eradicate much of the world’s misery, prosecute the dynasties responsible for 500 years (!!!) of accelerated economic crimes against humanity (including the use of their private central banks to mold government policy to foment wars for their own profit):

You want to fund your health care and pensions? Asset forfeiture of all those dynasties’ ill gotten gains would be a start. Even the octogenarian and nonagenarian perpetrators should be run to ground like Nazis with worldwide publicity of their crimes at their trials.

@ Mr. B and eeder:
Those who envy the military benefit package (if that’s where your comments are directed) overlook that it’s available to anyone who can meet the entrance requirements and are willing to pony up the decades of sacrifice required to earn it. That said, I consider it an honor and a privilege to have served my country in the military for over 26 years, and given you the right to post your opinions on this blog. You’re welcome.

@Mr. B and eeder:
Those who envy the military benefit package (if that’s where your comments are directed) overlook that it’s available to anyone who can meet the entrance requirements and are willing to pony up the decades of sacrifice required to earn it. That said, I consider it an honor and a privilege to have served my country in the military for over 26 years, and given you the right to post your opinions on this blog. You’re welcome.

Could someone here explain exactly what the term “pension” encompasses? For example, let say a widower has been receiving monthly payments based on the death of her spouse’s work related accident. Is that a pension? Or is pension only based on money an individual has earned and had removed from their paycheck over time, aside from social security?

A pension is pretty much any income that you receive after retirement, that was earned or created as a result of the work you did, that comes from a single source related to the work, and was set aside for that purpose by either the company or the worker during the work.

Pensions used to be funded by companies for their workers. Then they became faceless corps who could care less about the worker.

The banks bought legislation creating the 401K so people would place their retirement funds in the stock market. This resulted in massive stock market inflation, making the accounts appear to grow, sucking in more people to keep the charade going. Deferred taxes were used as a bribe to the people to get them to put money in one.

“Money” in ANY pension plan is money in someone else possession and control. All you have is promise that you will get what you are due based on the agreement.

Now people are no longer willing or able to contribute to the stock market funding 401K, so we have QE X propping it up for now.

As people are trying to get their money out, the banks are busy buying legislation to prevent it, or at least make it costly and difficult. More people are borrowing from their plans, so that too is being restricted and will eventually not be allowed.

Anyone left in “pensions” of any kind will be screwed and the account left worthless. It would be far better to plan on retiring with your personal savings, held in gold and silver, in your possession and under your control.

European American,
I have to disagree. Yes, it is a big deal. You paid in around 6%+ each and every paycheck and your employer paid in around 6%+ each and every paycheck for your ENTIRE working life. In my case that is 36+ years. It’s ALOT of money that they have pissed into the wind with their “LockBox” and empty promises. Imagine what you could do with that amount of money if we had never invented Social Security and Medicare. The monies I paid has gone to our parent’s profligate retirement lifestyles (golfing and RVing around the USA)and now there’s no money for our retirement. It’s catfood and living on the street for anyone younger than 60 years old, unless you saved outside the “system”.

Well “T” I should clarify my point. It’s not a big deal to me, personally. I have my reasons, and yes, I’ve not only saved outside the system, but more recently I’ve stepped outside the system. It’s a system based on corruption, top to bottom, and I didn’t want to support those individuals spending my hard earned dollars on a second home in the Caribbean. So, I look at those fiat dollars I worked hard for and paid into the system as part of my debt, my karma for not having got out of the system earlier. Whereas, you have definitely got a case for grabbing a pitchfork and storming their castle(s). Me, I’ll take my handful of doubloons and find their empty homes in the Caribbean and hope to lay low as the Storm passes over.

“There’s more to the picture than meets the eye” Gave my house to the F’n bank and cashed in my ‘IRA’ to live in the country surrounded by farms. Which country? Not that one boys and girls… get ready ( cause Ray Charles can see this storm coming) but be sure to enjoy life as you know it presently.

Some of us saw this coming decades ago with the hostile-takeovers in industry. Buy out the company, liquidate the pensions and shut the doors.

So then we moved on to pre-planned obsolescence in gov’t buildings. This bond will only add $4.63 to a tax bill on a $100K home. Just great. We build a $40M school to replace an out of code $1M school and our kids score less in testing. Kids in Europe go to school in 300 year old buildings and do better.

Then add in deferred maintenance. Monies were allocated, but where did the money go?

Add in the overpowering urge to incorporate the adjacent areas into the city limits to increase the tax base. All the new infrastructure paid for by bonds. Deferred maintenance of course.

Now factor in the so-called urban blight. All bulldozed for public housing. But why the blight? No jobs. Productive labor is what drives the economic engine. Supply/demand curves went out the window. No money in the hands of the voters, so we buy their votes.

So here we are. No pension monies, deteriorated infrastructure and heavy debt to income levels.

I still fail to see why the public maintains faith in city planning boards. They create nothing but the need for increased debt. The so-called protections of property values by zoning are all about protecting the tax base. Seems to have worked – not!

Folks, the cities are dying. The reason is simple – dependance on imports. The city must produce enough to buy its imported needs. What does a city produce? Oooo, I got it – debt.

Come you masters of war
You that build the big guns
You that build the death planes
You that build all the bombs
You that hide behind walls
You that hide behind desks
I just want you to know
I can see through your masks.

You that never done nothin’
But build to destroy
You play with my world
Like it’s your little toy
You put a gun in my hand
And you hide from my eyes
And you turn and run farther
When the fast bullets fly.

Like Judas of old
You lie and deceive
A world war can be won
You want me to believe
But I see through your eyes
And I see through your brain
Like I see through the water
That runs down my drain.

You fasten all the triggers
For the others to fire
Then you set back and watch
When the death count gets higher
You hide in your mansion’
As young people’s blood
Flows out of their bodies
And is buried in the mud.

You’ve thrown the worst fear
That can ever be hurled
Fear to bring children
Into the world
For threatening my baby
Unborn and unnamed
You ain’t worth the blood
That runs in your veins.

How much do I know
To talk out of turn
You might say that I’m young
You might say I’m unlearned
But there’s one thing I know
Though I’m younger than you
That even Jesus would never
Forgive what you do.

Let me ask you one question
Is your money that good
Will it buy you forgiveness
Do you think that it could
I think you will find
When your death takes its toll
All the money you made
Will never buy back your soul.

And I hope that you die
And your death’ll come soon
I will follow your casket
In the pale afternoon
And I’ll watch while you’re lowered
Down to your deathbed
And I’ll stand over your grave
‘Til I’m sure that you’re dead.

There is only one way to keep this game going if that is what they “truly” wanted, that would be “Universal Worldwide Debt Forgiveness” that would allow everyone to start all over, or reset the game so to speak..

That is not what they want, the money masters would lose all the control they have gained or hold now.. truth is, they want this game destroyed so they may roll out their choice of a solution and their chosen “Savior” of the world.. A new “World Control Game”.. one world government, one world army, etc, etc, etc..

you must destroy the old to start the new…. The old game of, Problem, Reaction and Solution (their solution that is)

but hey, don’t mind me LOL.. I am a nutso kind of guy with a nutso way of thinking…

Imagine playing Monopoly. Imagine getting near the end and YOU are winning. Then, imagine setting fire to the game board and pieces. Imagine grabbing the play money and going to the store to buy something nice for yourself with a pretty yellow $100 bill.

monopoly board on fire..lol, that is pretty good one, but the world is not going to burn up by destroying all debts.. you would still own Boardwalk and Park Place, what else do you want or have title to with your debt signature on it ??… LOL.. I only have Baltic Ave… 🙂

For those who are ready to retire I would recommend taking a Lump Sum if you have that option. Many pension funds allow for a lump sum and a direct transfer to an IRA, but they don’t advertise it because they want to retain control of your money.

Lump sums have a lot of advantages when it comes to survivor benefits as well. Let just say you use a systematic withdrawal instead of annuitising your pension. If you die early the full amount passes to your heirs or surviving spouse.

Now that’s not to say that down the road they won’t go after private IRA funds, but I think that would be much lower in the pecking order.

I drained my 401k las year and paid off everything, but the house. If the SHTF, they will take it anyway. I am preppin’ and armin’ and ready to bugout. Yes, I paid the penalty and the taxes. I was not losing anything, but it was not making anything either. I thought it was better to use it than lose it. I am so happy I did.

Should your “bugout” plan be considered literal or a metaphor for laying low? If it was to be understood as literal, where would you bugout to? Out of the city? Out of the country? I think it was smart that you got what you could out of the system but I really wonder if it’s too late to actually bug out? If anything, I would thing “bugging in” (fortifying your present position) would be far more advantageous.

This government is NOT going to go bankrupt. We have the printing presses, we have the rest of the world by the balls, we have three generations of simpletons who are fully indoctrinated into the financial/economic/educational system of this country. WE in the working class will go bankrupt and yes, some will pillage and burn/piss and moan much like is happening in Greece; but then the cold, dark, and grim reality will set in that the Government we have all come to know and despise is the only source of food, shelter, medicine, energy, safety, and “wealth” to be had by the majority of people in this country…..the same majority that ushered in this sideshow of hope and change and will continue to vote for bread and circuses. The entitlement class does not care who pays for all of this shit because it is a fact that it will not be them. The DREAM act recipients do not care who will pay for this shit because it is a fact that it will not be them. Our “representatives” do not care who pays for this shit because they are so consumed by an inordinate lust for power and control that they are nearly indistinguishable in nature from psychopaths. Even if you do get your pension it will take $300 to buy a loaf of bread.

After every run of a large government printing money, the result has been war. In the case of the USA, “we” are in four or five wars now which all require money printing as financing. It is certain that those areas which are not financing wars and subsequently printing currency will be much better off than the USA.

The goobermint is currently eating itself up without being able to raise the so called political debt limit (if there really was one). Mac is very articulate in describing the “real” debt limit. Just before or when that happens, we will wake up to drastic changes or world war or both. Most states have been surviving off of fed fiat stimulas for years now.

Mac,
Not sure if this fit here, or not, but we havce all sen foiod prices going up, leading to poor getting poorer, while the rich get richer, corporate (federally subsidized) farms have become the rule….. and shit is hitting the fan…. and now… remember how they blew those levies in Misouri?/ I wondered then, why / how/ what is the deal with houses that have existed for 50 years, why are they flodding now? It makes no sense.

“”Feds buying up farmland they flooded; Soros in on it””

A Missouri farming and ranching contact just got off a conference call wherein he was informed that the federal government is sending out letters to all of the flooded out farmers in the Missouri River flood plain and bottoms notifying them that the Army Corps of Engineers will offer to BUY THEIR LAND.

And alot of this prime land will be given to envirowacko groups and the like…safe to say it’ll not produce food again for a long spell if ever…starve them city slickers to death has been the plan for awhile from where I stand.

Every senior NCO and field grade officer in the military understands the term “lines of communications.” It is NOT telephone, radio or wide-band internet. It is logistical support. Move beans, fuel and bullets to the front and the wounded to the rear. Failure is NOT an option ergo the frontlines stall quite often while the logistical support catch up.

In the city, the same problem always arises. Food and goods are moved in and refuse is moved out. Rome had its aqueducts and cloaca as well as port facilities and the extensive highway network. The infrastructure was paid for by conquest. Ie. someone else’s wealth.

So why does a city exist? Wealth. Wealth is nothing more than disposable income and leisure time. Those who have it tend to want entertainment, finer goods and services. Wealth attracts wealth. It also attracts those wanting a better life.

Each city will face the same problem, higher demand for public services which increase the fixed costs of production. Competition soon drives all but the manufacturers of high end goods to move production elsewhere. This results in job losses, decreased tax base and urban blight. Enter urban renewal and subsidized housing.

Sooner or later the same end result hits the city-state; serious cash-flow problems. In Rome, it led to currency de-basement. And along came inflation. With the job losses and reduced tax revenues, the lower classes got caught in an economic vise. Not enough income to maintain their standard of living and not enough money to escape. To maintain public order, more and more of the infrastrucure must be subsidized. Maintenance is deferred.

To keep the public from grasping the dire circumstances, entertainment is key. Cable TV with 150 channels of nonsense, theaters and sports arenas. This course of action doesn’t last long. When the public is broke, it can’t pay the bills for entertainment. The limits of growth have been exceeded. Costs become far greater than the income needed to support it.

Nothing can reverse this trend. It is integral to the human condition. No income derived from productivity always results in greater demands on the lines of communications. For the city-state, the greatest demand is for money to support the costs of its imports and exports. Garbage, sewage and water treatment are exports. On top of this is the exports of money via the commuters. Remember that deferred maintenance of infrastructure? It just gets worse as tax revenues decline.

The wealth that is left in the city soon gets dispersed elsewhere and financing for additional growth hits the limit. The city goes into further decline. Even monies for industry seek investment opportunities elsewhere. The opportunities are far removed from the city and consequently the area surrounding the city-state goes into economic decline. The contagion spreads.

In order to maintain some semblence of civilization, public assets get privatized. Fear drives city management to seek creative financing alternatives. Assets are used for collateralized loans. Pension payments get deferred and in the end, get used for stop-gap daily financing. The spreading contagion soon eliminates external means of financing the city’s line of communications. The death of the city-state becomes a certainty.

Want some examples? Look to Detroit, Pittsburg or California. I reminded of the phrase popularized by Dr. Phil, “If you always do what you always did, you’ll always get what you always got.” History is cyclical because each generation truly believes it is smarter than the previous. We refuse to admit the fundamental problem and treat the symptoms because we studied what went wrong. The problem was, is and will always be centralization.

The more you centralize a civilization, the greater the vulnerability to disruptions in the lines of communications. Every increase in complexity results in increased vulnerability to black swan events. With everything connected to everything, you set the system up for cascade failures. Just in time deliveries turn to crap with each snowstorm or flood. Weather can eliminate entire growing seasons. A strike by a union can leave garbage piled in the street. Few want to address the problems with centralized water distribution.

In every depression and collapse, what remaining wealth soon gravitated to the countryside. In most cases, the nation-states turned to conquest to rebuilt the treasury. It too always failed. The beans and bullets are consumed without producing any tangible goods that are in demand. Furthermore, this consumption raises the inflation rate by increasing demand. The public is forced to finance this indirect tax. But every depression needs an enemy to fight against.

Wars are fought over resources. Ideology is the illusion used to garner public support for the war. Few ever recognize that the costs of keeping an army in the field greatly exceeds the potential income derived from winning. Inflation is the only recourse for maintaining the lines of communications. We still haven’t paid off the true costs of Nam and it happened over 30 years ago. However we now hire foreign contractors to transport beans and bullets to our troops.

Nuf said.

PS. The real reason for government involvement in the markets, local gov’t and personal lives is the complexity of these lines of communications. They know it is far too complex, but increased data provides a slim possibility to have a plan ready. Kinda like the Patriot Act and ObummerCare.

OTE is right when he says that the present liquidation and confiscation of pension funds could be foreseen decades ago. I knew unfunded pension plans were next after 1987, when the lobbyists for the Gangster Banksters manipulated Congress for a RETROACTIVE law that destroyed the savings and loan industry and transferred the deposits to the Commercial Bankers.

Now there are five major banks, instead of dozens. The concentration of wealth and power continues to this day.

The seeds for the mass confiscation of pension funds by the Gangster Banksters and Government were sown then. Many pensions were destroyed by the S&L Debacle; many were underfunded, and many more were insured with the US Government.

So WHO picked up the tab then, for the pensions and mortgages? The US taxpayer. And who benefited? That’s right the Gangster Banksters. Folks that was just a trial run for the present confiscation of American wealth, and a minor prelude to what they have planned for US.

I got a notice in the mail that our local union pension was in serious financial trouble and in danger of insolvency.
I have talked about the letter with some financial advisers and they say do not worry because pensions are insured.
Well if that is the case just how many pensions plans in the United States are in trouble? And how many can the Feds afford to insure?
Just wondering when it all collapses after being propped up, what will be left? and what will it look like?

MPIT: That was my point exactly. US taxpayers will be asked to foot the bill for these insured pensions and when the money is gone, the pensioners will be broke with the rest of America.

I say if they pensioners must eat cake , lets start with the Federal Government Pensions.

Big Business now has a program of long term temp workers so that to get hired you must work your ass off for slave wages. Afterwards they cull the herd every few years to make sure no one becomes vested.

Every dollar BIG Management saves is another buck in their pocket and another bounce in their stock price.

MyPensionintrouble,
I’ll take a guess at what “it” will look like:
1. a much lower standard of living for the average person;
2. much higher prices of everything, except your dollar priced savings account or pension plan;
3. decrepit and rundown roads, bridges, utility lines, underground water lines, etc.
4. an enraged citizenry that realizes the entitlement promises just cannot be kept without stealing every penny from our children in taxes.
5. Massive unemployment, as businesses will continue to shutdown or move offshore to escape the inevitable class warfare taxation, the frivolous lawsuits, the healthcare mandates, the regulations.

In summary, the USA will begin to look like Cuba or the old Soviet Union — old cars, rundown homes, scruffy clothing, lots of commercial real estate with FOR SALE signs and broken out windows. Massive amounts of deferred maintenance on everything from cars, to homes, etc. Millions of people living on the street, under bridges. Not pretty.

The good news is that eventually the USA will break up into sub-countries that want to return to our founding principles — The Republic of Texas; the Republic of North and South Dakota, etc. You can say goodbye to the liberal east and west coasts — they will turn into giant versions of Detroit.

T: Not gonna happen. Americans will change the direction of the PTB and the gangster banksters, by putting them in jail, kicking them out of office and taking back the country long before that happens.

You might be helpless, but everyone else isn’t. There are enough Americans who want change and will see to itthat they get it.

There are enough Americans, problem is will they get up off their collective ass’s in time!!!

Look at where we are right now. To me, this puts it in a nut shell. I went to my first Tea Party 2 years ago. I live in a town of less than 1 million, we had roughly 5-6000 people show up at that Tea Party on April 15. That was one of the highest turns outs per capita in the entire country.

Even the Tea Part people were not united. A second Tea party group formed because they didn’t like how the first one was doing it. The next April we had two Tea Parties, one day apart. There were less than 2000 at either one. I went to both. This year, we had one Tea Party, and there were less than 100 people that came.

So where the hell are all of these Americans that are going to stand up to our government, our National Guard when they come to take our guns or our bullion or our food, cause we’re hording don’t you know.

We can put 80,000 screaming fans in a frigging football stadium each and every weekend, dozens and dozens of them all over the country, yet we can’t get but .006% of the population to show up for a Tea Party.

I am not saying the Tea Parties are the answer to anything, but it was a damn good start. I hate the fact that the Republican party, Michelle Bachman and the like have co-opted the Tea Party and turned them into a third political party.

I hope to God there are enough real Americans that will stand up, problem is they should be standing up right now, but they ARE NOT!!

Oh, and Durango Kidd, show some class, I think you are showing who the real moron is here.

I feel your rage Durango Kidd, but look at he Greeks, they are rioting and pillaging, and the Government still passed Austerity, so what did they accomplish, their standard of living is going down anyway despite all the fires and attacks against establishment.
I have a gut feeling T is correct and you my friend are very wrong, get ready Durango Kidd because Hellish living conditions are coming to a state like yours.
And if you or anyone else in America revolts against the elite, they will tag you, tax you, criminalize you, and destroy you, and they will house you in one of the many large prisons in the United States.

The pension funds are just part of the problem. The FDIC is broke and they are supposedly insuring over $7 trillion in the banks in this country.
Insurance companies, they are barely keeping their head above water. State Farm was the only self insured company back when Katrina hit. They had 40 billion in assets, they lost $20B in that storm alone. I know people that had insurance claims from over a year ago that have been paid less than half of the loss. Now those companies have to deal with the tornado’s and flood damage this summer. Insurance companies like all of the pension funds invested in real estate and the stock market. They will the next you see lobbying the government for a bailout.
This whole system we live in is so over leveraged, there is no way we can come out of this without complete and utter collapse. It will worse than any of us can possibly imagine, it will make the great depression look like party.
Americans back then were different, they were proud and self sufficient. The majority of the population didn’t live all bunched together in big cities. People knew their neighbors, trusted one another.
I think those of us in the mid west might have a chance to survive, but those of you on the right and left coasts are in real trouble. Look what is happening all around us. The riots in Grease will be here soon, it’s just a matter of time.
Those that can, get out of the cities. Get rural, buy land and learn to farm. Build a community of people around you that you can trust, quite possibly with your life. That is the only long term survival chance I see anyone having.

OKPrepper-Excellent point about the insurance companies. When the one who is supposedly your financial back-up, whether it’s a gov agency, insurance company or uncle joe with a coffee can full of cash, if they are broke or have nothing but worthless paper, then you really have no back-up. Most people here understand that, but sadly the overwhelming majority of americans don’t. We are fast approaching the point where NO paper asset, corp or gov agency, or anything else is gonna be able to actually deliver the stuff we need to survive. Overtheedge said it best a couple posts above. And DK clearly identifies the true beneficiaries of this mess- the banksters.
My personal response to all this is to get out of the way, as much as possible, and do everything I can to be self sufficient. Pretty much what all of us are trying to do. Only wish we had more time and resources to get prepared with.

It’s sad that it seems like those of us that have a clue what to do most often don’t have the resources. Those that have the resources don’t have a clue. Honestly most of them I would not wont watching my back anyway.

For those that have never heard of it, or have not taken the time to read it, if you really want to know who it is that is behind this entire plan to tear apart this country and the rest of the world and reshape it into something new, read The Creature From Jekyll Island.

G Edward Griffin pulls back the covers for every one to see who the real bad guys are, and yes it is the big old money, the bankers in here and in Europe.

bo bo is not a million-air? He should raise taxes on himself & anony. Maybe they could buy their own health insurance & take the bus. You need to do “a” job and become “a” leader. Take the arabic curtains down behind you while on the boob tube.

No doubt about it, the ‘manure’ is about to meet the ‘fan’…I think I heard actually that June 30th is when the Fed stops buying treasuries, at that point who I ask WHO is going to purchase them? Things are poised to get real bad real fast, and when the economy tanks (according to Gerald Celente)countries look at war to fix it, so World War III is probably a lot sooner then you may think.

This is why we created a social networking website. This ain’t no Facebook, we actually encourage alias’s and fake pictures (so long as they’re appropriate, nothing nude please we don’t wanna see THAT…again…LOL) Everything shortly will be locked private and an invite only basis, so if you’re interested act fast and PLEASE help get the word out of this newly launched website

Hopefully they do buy us more time but as you said even if they do, it’s QE3 without saying it is they can’t keep this charade up forever this is exactly why many people wanted everything to crash, burn and rebuild from start as opposed to T.A.R.P and ‘American Recovery and Re-Investment Act”

i am a teenager and i hear my parents talking about it all the time, but i am too young and too inexperienced to understand all this economic jive talk.

so if someone out there can please explain to me:
What Feds buying treasury has to do with anything?
what the heck are treasuries anyway?
Why can’t we just print our own money instead of relying on someone else?

I have tried wiki and other sites but all this talk about feds buying up treasuries is too way too complicated.
that’s why us young people do not care, because we cant understand your adult Jive talk.

please help i want to understand what my parents are yapping about all the time at the dinner table.

“Buying up the treasuries” in a sense all that means is that the Feds are pumping trillions into our economy to give it a loan (sort of) do you see how the national deficit is constantly rising and at scary levels now? Happening because the feds are basically buying US debt it’s equal to taking money out of an ATM with your credit card to pay….the same credit card bill…it just doesn’t work out at all but we had little choice left

They’re buying time by creating scary levels of debt, but as they do this our dollar becomes watered down and less valuable sooner or later the fed won’t have any $$ left to throw into their own debt, and when that happens (possibly June but it looks like it could be 3rd Quarter which is the months of July 1st to October 1st) our dollar is going to be worth basically the paper that it’s printed on (almost jack squat) the whole thing with Treasuries is that it’s an investment and that you get money back, other countries/creditors aren’t going to feel that way when they see how worthless our dollar is, so when the fed stops pumping massive amounts of money into the economy, who will? Hope that helps, that was the best way I could explain it

Not exactly Kyle, but I don’t have time to explain fully right now as I was just about to exit the net. Just know that the money is not going into the “economy” it is going into the accounts of the member banks of the federal reserve to bolster their balance sheets against mortgage and derivates losses so they can maintain their required liquidity levels.

If it were going into the economy we would have runaway inflation, instead of double digit inflation, which is right around the corner.

You are right that they are trying to buy time. They want to wait until after the next election and then the INFLATION starts in a BIG way: 18 months is not that long to keep the ponzi scheme going.

On a brighter note: I’m teaching my 12 yr old granddaughter how to shoot! By her 3rd lesson, she’s putting 80% of her shots into a 4inch target at 100 feet, and that’s with an old open sight el-cheapo .22! Damn, I’m proud of her! Give that girl a good scoped rifle and we’ll have a sniper! Looks like we have a budding Annie Oakley in the family!

Granny Hawkins: So, you’ll be Josey Wales.
Josey Wales: Now, how might you know that, Granny?
Granny Hawkins: Soldiers were here looking for you ’bout two hours ago.
[Josey looks at Carstairs]
Sim Carstairs: Uh, I was goin’ to mention that to you… as soon as I got the chance.
Granny Hawkins: They say you killed your own men.
Jamie: Those lying, blue-scum bellies…
Granny Hawkins: They say you’re a hard put and desperate man, Josey Wales. They’re goin’ to heel and hide you to a barn door. You know what I say?
Josey Wales: What’s that?
Granny Hawkins: I say that big talk’s worth doodly-squat. Now, them poultices be laced with feathermoss and mustard root. Mind you drop water on ’em occasional and keep ’em damp.
[Walks off]
Granny Hawkins: You can pay me when you see me again, Josey Wales.
Josey Wales: I reckon so.

I trust you DK…and I bought a truckload of 24 double rolls @ $9 at DG…up to 3 years, 8 months now…gonna get more tomorrow!!
I sincerely don’t see how this nation can survive another 18 months, but am gonna trust you and continue the weekly visit to Sam’s for rice, tuna, and buillon cubes.

Our pensions, both public and private, are the only assets that are available for pillage by our elected officials at all levels of government. How about a nice Treasury Bond paying what amounts to next to nothing on what was formally your own retirement account? This won’t come close to providing what is needed when you have future unfunded liabilities totaling at least $60 Trillion Dollars as a minimum floor for what will be needed, but we can kick the can down the road for awhile with this scheme. It all goes KA-BOOM either way just as Minsky predicted.

The parasites who ride in the wagon are the first to become indignant at ANY opportunity.
—————————————-

That would be the cocoapuffers that are invading the social service office everyday. They get the free food stamps, the free housing, and the free medical care. The working class go to work to support these slugs. The entitlements are what has to stop. Socialism works until you run out of other people’s money. SO is retiring after 40 years with the same company. No point in working when the same amount of money will be coming in.

OK Prepper: Kiss my grits! If OUR country had a nickel for every time some moron posted the Russian propaganda on this site that the US was going to break up into regional countries, balkin style, then WE could pay off the national debt, secure the finances of social security, protect the pensions of every working American, and provide free health to everybody; and not just ILLEGALS.

It aint gonna happen.

There is a battle for OUR minds on the internet and some people bring that battle here. Others repeat the mindless chatter that they hear that has no basis in reality, and I am going to challenge that moronic propaganda every time I see it or hear it.

I bought a T-shirt from SHTF America the other day that reads:

“There is nothing wrong with America that faith, love of freedom, intelligence, and the energy of her people cannot cure” – Dwight David Eisenhower

I wear it proudly. Get one of your own.

There are those here who are fear mongers; others who are filled with fear of the unknown, some who have never faced a harsh reality and survived. Those of US who are strong enough, need to lend that strength to others who need it.

There is nothing going on in this country that cannot be changed by those few who are committed to taking the country back from the PTB: the gangster banksters, big business, and globalist government. There are many more of US then there are of them. Its OUR country, not theirs.

They need to fear US. America is awake, America is aware, and America is goinbg to reflect the values of our founding fathers once again. It won’t happen overnight. Revolutions never do.

This is OUR country and there is no reason for the average American to accept what has passed as government of the people, by the people, and for the people, from these globalists in DC.

Its time to eradicte the G-Flu: R1, D1, L1 Get on board or get out of the way.

To all those folks that retired on a pension, like my sister, at ***49**** years old, I say, TOO BAD. Go back to work like the rest of us. I’ve never had a pension any where I worked, and you can be DARNED sure I am not going to cover someone else’s pension while I eat cat food.

I have another family member, a teacher, who is retiring in her mid-50s at – get this – $7,000 per MONTH.

Tell you what: All you free lunchers can all live off of each other. I’m going Galt.

Anyone that has a city, county, state or federal pension really needs to beat them to it… take it away from them and pay the taxes, then spend the proceeds on precious metals and freeze-dried foods.
After “they” have taken those pension funds, they will “nationalize” your 401Ks and IRAs. You might as well beat them to it now while metals prices are down.

I like things that go bang for the kiddies as much as anyone else, but anyone who celebrates July 4th as an independence day is deluded.

We never won our independence and if we did it was temporary at best. The euro elite run this country, absolutely.

Do people even know that after we supposedly ‘won’ that British troops were here for 21 years afterward?

Once they installed their law, courts, and monetary system on us, only then did they leave. In the 1800s they established us as a sub-corporation of the British Empire; aka the District of Columbia.

Americans proudly proclaim that they are free, but that is far from the case. We are stock in a corporation literally. Your birth certificate has a capital red series of numbers; your stock number. You then get to spend the rest of your life paying 1.5 days of your work week in taxes to your owners via their Fed Researve and Fed Tax.

Most of us are common stock of course.

The United States of America is not a land mass. It is a corporation. Like all corporations, we have a treasurer, a pres and vice pres, etc. But the REAL POWER in every corp is from the hidden folks – the board of directors. That my friends is the global banking elite families.

We are debt slaves, obedient workers because we are not aware of our slave status.

Pensions wouldn’t be in danger except for the top 1%. Raise taxes to promote “the general Welfare” (see US Constitution) and social security and medicare and medicaid and pensions would be solvent. We have enough people to grow and harvest crops in the field. We have enough people to clean the streets and maintain the roads and bridges. We have enough people to train new doctors and provide basic healthcare for everyone. We now have more than enough houses built in the country to house everyone. All the basic necessities are available, but the reason people live in poverty and go hungry is because the top 1% suck the profits out of the system. Millions of poor people work every day creating value for society, but all the wealth goes to the top. The people who actually DO THE WORK stay poor. See the big picture? Something needs to change and taxes are the best and most PEACEFUL way of creating that change.

The content on this site is provided as general information only. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a financial interest in any company or advertiser referenced. Any action taken as a result of information, analysis, or advertisement on this site is ultimately the responsibility of the reader.

SHTFplan is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.